Memorandum

CITY OF DALLAS

DATE November 26, 2014

TO Housing Committee Members: Carolyn R. Davis, Chair, Scott Griggs,Vice-Chair, Monica Alonzo, Rick Callahan, Dwaine Caraway, and PhilipKingston

Mortgage Assistance Program Update

On Monday December 1, 2014, you will be briefed on MortgageAssistance Program Update. A copy of the briefing is attached.

Please let me know if you have any questions.

Theresa O’DonnellChief Planning Officer

C: The Honorable Mayor and Members of the City CouncilA. C. Gonzalez, City ManagerRosa A. Rios, City SecretaryWarren M.S. Ernst, City AttorneyCraig Kinton, City AuditorDaniel F. Solis, Administrative JudgeRyan S. Evans, First Assistant City ManagerEric D. Campbell, Assistant City ManagerJill A. Jordan, P. E., Assistant City ManagerMark McDaniel, Assistant City ManagerJoey Zapata, Assistant City ManagerJeanne Chipperfield, Chief Financial OfficerSana Syed, Public Information OfficerElsa Cantu, Assistant to the City Manager — Mayor and Council

“Dallas, The City That Works: Diverse, Vibrant and Progressive.”

Mortgage Assistance Program

Update

A Briefing to the

Housing Committee

Housing/Community Services Department

December 1, 2014

2

KEY FOCUS AREA:

ECONOMIC VIBRANCY

Purpose

To provide an update regarding the

Mortgage Assistance Program (MAP)

To recommend changes to the program

for FY2014-15

3

MAP Program Purpose

To incentivize homeownership within the

city of Dallas

$2,743 taxes gained per $100K valuation

Wealth is created for low to moderate

income households

Specifically incentivize homeownership and

development in areas of interest to the City

4

Housing Market Conditions

Seller’s market with low inventory Competition for available properties

Tight credit score requirements Slow approvals

More paperwork

Lender legal issues Bank settlements with Federal Government past loan

servicing and foreclosure abuses and fraud Wells Fargo Lift Program

$5 million down payment assistance program

Added layer of out of state underwriting

Citibank settlement may affect program in future

Bank of America settlement may affect program in future

5

Program Partners FY 2013-14

48 Lenders

48 Title Companies

6 Homebuyer Education Providers

6 CHDOs

Leveraging Private Dollars FY 2012-2013 $5,567,481 (6.6:1)

FY 2013-2014 $7,801,323 (6.7:1)

19 MAP training sessions held with Lenders, Realtors and other program partners

15 Marketing events held with potential homebuyer groups

6

Program Guidelines

MAP provides principal reduction and closing cost assistance

Homes purchased must be in the city of Dallas

Eligible homebuyers’ gross income cannot exceed 80% of the Area Median Family Income (AMFI), adjusted for family size

Eligible homebuyers must: Be a U.S. citizen or permanent resident

Complete a homebuyer education class in order to qualify

Agree to occupy the home as a primary residence

Homes are inspected prior to purchase and must meet Minimum Acceptable Property Standards (MAPS) MAP provides up to $1,500 for MAPS repairs which must be completed

prior to closing on existing homes

The sales price of the home may not exceed $195,000 for new construction and $145,000 for existing construction

7

Program Guidelines (cont.)

Borrower must have continuous, satisfactory employment history for the past six months

Borrower’s down payment must satisfy the MAP lender’s minimum requirements

Borrower may not have more than $4,000 plus two month’s gross income after closing

Borrower must qualify for a conventional, FHA, or portfolio mortgage loan from a participating MAP lender

No adjustable rate mortgages

Borrower cannot receive cash back at closing

Debt Ratio for housing expenses & other debt cannot exceed 45% at loan approval

8

MAP LENDING PROCESS

Homebuyer attends and receives course completion certification from participating homebuyer counseling agency

Homebuyer gets pre-qualified for a loan with one of the participating MAP lenders

Homebuyer contacts Real Estate agent to locate a suitable home

Lender registers homebuyer online with MAP to reserve funds

Lender submits loan package to MAP staff

MAP staff underwrites the loan and submits funding to title company

Homebuyer closes loan at title company

Note: Program information and registration process are available on the MAP website at www.dallasmap.org

9

FY 2013-14 Program Guidelines

Category Maximum

Assistance Lien Term

Existing Homes $8,500 5 years

Community Housing

Development Organization

(CHDO)

$20,000 10 years

Land Bank $10,000 5 years

10

MAP Production

FY2012-13 FY 2013-14

Unit Production 64 93

Total Subsidy $844,500 $1,159,228

Private Dollars

Leveraged $5,567,481 $7,801,323

Average Sales Price $96,414 $97,391

11

MAP Snapshot

HOUSEHOLD INCOME BREAKDOWN

INCOME FY

2012-13

FY

2013-14

30% and Below 0 0

31%-50% 10 18

51%-67% 28 37

68%-80% 26 38

Total 64 93

12

MAP Snapshot

ETHNICITY BREAKDOWN

ETHNICITY FY

2012-13

FY

2013-14

Anglo 2 2

African American 15 34

Hispanic 46 54

Other 1 3

Total 64 93

13

MAP Budget

FY2013-14 FY2014-15

Community Development Block Grant $1,300,000 $1,165,856

HOME Investment Partnership Program $ 800,000 $ 957,158

Total Allocation $2,100,000 $2,123,014

14

Proposed Program Changes for

FY 2013-14

Category Maximum

Assistance Lien Term

Existing Homes

New Construction*

*Includes non-profit and for-profit

organizations

$14,000 5 years

CHDO $20,000 10 years

Land Bank $20,000 10 years

Neighborhood Investment

Program Area or other

Designated Area

$20,000 10 years

15

Next Steps

January 14, 2015 – City Council will consider

amendments to the program statement for FY2014-15

Training & Marketing in January 2015

Exhibit A

Area Median Family Income (AMFI)

For 2014

17

Area Median Family Income for 2014

% Income

Family Size

1 2 3 4 5

30% $14,250 $16,300 $18,350 $20,350 $22,000

50% $23,800 $27,200 $30,600 $33,950 $36,700

80% $38,050 $43,450 $48,900 $54,300 $58,650

100% $47,530 $54,320 $61,110 $67,900 $73,332

120% $57,036 $65,184 $73,332 $81,480 $87,998

Exhibit B

AMFI and Affordability

of Housing

19

Low-to-Moderate Income Buyer

Family

Size

80% of

AMFI

Income

per Month

30% of

income paid

for housing

40% of income

paid for

housing

45% of income

paid for

housing

1 $38,050 $3,171 $951/mo $1,268/mo $1,427/mo

2 $43,450 $3,621 $1,086/mo $1,448/mo $1,629/mo

3 $48,900 $4,075 $1,223/mo $1,630/mo $1,834/mo

4 $54,300 $4,525 $1,358/mo $1,810/mo $2,036/mo

Exhibit C

Marketing and Training

FY2013-14

21

Marketing

Date Event Location

# in

Attendance

10/12/2013

Builders of Hope/Dallas Home

Connection/Homebuyer Club El Centro College - West Campus 15

10/26/2013 Homebuyer Expo - DCHLCC Friendship West Baptist Church 200

2/14/2014 Neighborhood Lift - BCL of Texas BCL of Texas 700

2/22/2014 Homebuyer Fair - BCL of Texas Senter Park Recreation Center 100

2/28-3/1/2014 Neighborhood Lift - Wells Fargo Hilton Anatole Hotel 700

3/15/2014 Homebuyer Education Class North Texas Housing Coalition 25

3/15/2014 Budgeting & Homebuying Workshop MLK Community Center 3

3/22/2014 Dallas Home Connection MLK Community Center 40

4/3/2014 Wells Fargo - CineMeeting North Park Theater 200

4/12/2014

Dallas Association of Realtists Homebuyer

Expo Southwest Center Mall 75

6/7/2014 Dallas Home Connection Homebuyer Seminar City Square Operation Center 40

7/12/2014 Capital One Homebuyers Expo Crown Plaza 91

7/19/2014

Dallas Home Connection - Homebuyer

Workshop City Square Operation Center 6

8/23/2014 Neighborhood Block Party Swiss Ave 30

9/20/2014 Healthy, Wealthy, Wise Community Fair MLK Community Center 100

22

Training

Date Event Location

# in

Attendance

10/4/2013 MAP 2013-14 Program Rollout Training

Center for Community

Cooperation 112

10/22/2013 JP Morgan Chase Training Dallas City Hall 6

1/14/2014 Wells Fargo Home Mortgage Training Dallas City Hall 3

1/15/2014 Valley National Mortgage Company Training Dallas City Hall 5

1/29/2014 Wells Fargo Home Mortgage MAP Training Wells Fargo Bank 15

2/12/2014 JP Morgan Chase Training Dallas City Hall 8

3/5/2014 Guild Mortgage - MAP Training Guild Mortgage 5

3/19/2014 Wells Fargo Home Mortgage MAP Training Dallas City Hall 4

3/25/2014 Wells Fargo - MAP Training Dallas City Hall 3

4/4/2014 Prime Lending - MAP Training Prime Lending 10

4/9/2014 Bank of America - Lunch & Learn Training Casa Rita's Mexican Grill 30

4/17/2014 New American Funding – Training Dallas City Hall 1

5/6/2014 Dallas Area Habitat for Humanity - MAP Training Dallas Area Habitat for Humanity 10

5/15/2014 Wells Fargo – Training Dallas City Hall 1

5/29/2014 MAP LO Training (North Dallas & Evolve Bank) Dallas City Hall 4

6/17/2014 NAHREP North Texas Training Las Colinas Country Club 85

7/9/2014 Capital One & Guild Mtg Training Dallas City Hall 2

7/23/2014 Capital One - MAP Training Capital One Operations Center 15

8/5/2014 Ultima Real Estate – MAP Training Ultima Real Estate 7